Thread and Full Text View

Minimising the other company's profit may be a WAY to drive it out of the market. But the final GOAL of a company is maximize profits. Or at least that is a very good aproximation to what they do.
[View full text and thread]

When I sat my third year microeconomics course, it suddenly dawned on me. The assumptions under game theory were too simple. Why not change the assumption from a profit making firm (the example in which I had to examine), to a firm that minimises the profit of it's competitor. Although, in theory, this may make the original firm unprofitable, profit minimisation of your competitior might be a sufficiently credible threat to prevent entry.

What do you guys think? Have any papers been written about that sort of thing?[Manage messages]